WAYNE HALL VS. CUMBERLAND MUTUAL FIRE INSURANCE COMPANYÂ (L-0368-14, CAPE MAY COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-5474-14T4
WAYNE HALL,
Plaintiff-Appellant,
v.
CUMBERLAND MUTUAL FIRE
INSURANCE COMPANY,
Defendant-Respondent.
_________________________________
Submitted December 8, 2016 – Decided August 17, 2017
Before Judges O'Connor and Whipple.
On appeal from Superior Court of New
Jersey, Law Division, Cape May County,
Docket No. L-0368-14.
Claims Worldwide, LLC, attorneys for
appellant (Daniel W. Ballard, on the
brief).
Methfessel & Werbel, attorneys for
respondent (Richard A. Nelke and
Christian R. Baillie, on the brief).
PER CURIAM
Plaintiff Wayne Hall appeals from a July 6, 2015 Law
Division order denying his motion for reconsideration of an
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order granting defendant Cumberland Mutual Fire Insurance
Company summary judgment dismissal. We affirm.
I
In August 2013, plaintiff's home was damaged during a
wind storm. Plaintiff submitted a claim under his
homeowner's insurance policy issued by defendant. Both
parties retained independent adjusters to appraise and
provide estimates of the cost to repair or replace various
parts of the building. It was not disputed the roof had to
be replaced and portions of the home's interior repaired.
Plaintiff's adjuster estimated the cost to restore the
property, referred to as the replacement cost value, was
$24,356.57. Defendant's adjuster estimated the replacement
cost value was $21,781.77. Defendant took the position
that, after removing $5771.25 for depreciation, plaintiff
was entitled to $16,010.52, referred to as the actual cash
value. After subtracting the $1000 deductible, defendant
maintained plaintiff was entitled to $15,010.52.
Despite the differences between the two adjustors
about the overall replacement cost value, plaintiff
ultimately signed a "Sworn Statement in Proof of Loss"
(proof of loss), attesting the replacement cost value of
$16,010.52 and the depreciation value of $5771.25 was
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accurate. Defendant then paid plaintiff $15,010.52, the
actual cash value minus the deductible. Plaintiff hired a
contractor who replaced the roof, but plaintiff did not
arrange for any other work to be done on the house.
The cost to replace the roof was $10,100. Defendant
had estimated that, for the roof, the replacement cost
value was $9059.98 and the value of the depreciation was
$3351.10, making the actual cash value of the roof
$5708.88. Plaintiff claimed the policy required that, if
an insured repaired or replaced a component of a building,
such as a roof, and the actual cost exceeded the actual
cash value of such component, defendant was obligated to
pay the insured the difference between the actual cost and
the actual cost value. Thus, plaintiff demanded defendant
pay him $4391.12, the difference between the cost to
replace the roof ($10,100) and the roof's actual cash value
($5708.88). He also asserted he was entitled to the
depreciation attributable to the roof and insisted
defendant pay him $3351.10, as well.
Plaintiff referred to the following language in
support of his position:
2. Buildings covered . . . at
replacement cost without deduction for
depreciation, [are] subject to the
following:
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a. [W]e will pay the cost to
repair or replace, after
application of any deductible and
without deduction for
depreciation, but not more than
the least of the following
amounts:
(1) The limit of liability
under this policy that
applies to the building;
(2) The replacement cost of
that part of the building
damaged with material of like
kind and quality and for like
use; or
(3) The necessary amount
actually spent to repair or
replace the damaged building.
. . . .
d. We will pay no more than the
actual cash value of the damage
until actual repair or replacement
is complete. Once actual repair
or replacement is complete, we
will settle the loss as noted in
2.a. and b. above.
[(Emphasis added).]
Defendant disputed the language supported plaintiff's
demands. Defendant maintained that, at best, plaintiff was
eligible to recover the value of the depreciation, but not
until plaintiff had spent the entirety of the actual cash
value provided to him on his claim, or $15,010.52.
Therefore, defendant refused to pay plaintiff either the
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$4391.12 or the $3351.10 he requested. Plaintiff responded
by filing suit.
In his complaint, plaintiff asserted a claim for
breach of contract, alleging defendant failed to indemnify
him as required under the policy. He also maintained
defendant breached the implied covenant of good faith and
fair dealing contained in every insurance contract, see
Wood v. N.J. Mfrs. Ins. Co., 206 N.J. 562, 577-78 (2011).
After the close of discovery, defendant sought summary
judgment dismissal of the complaint. Plaintiff did not
oppose the motion. Finding the language in the policy
dispositive, the trial court granted defendant's motion and
dismissed the complaint.
Plaintiff filed a motion for reconsideration, claiming
he had never been served with the motion for summary
judgment. He also contended a question of fact and the
court's misinterpretation of the policy language precluded
summary judgment. As he was required to show that, one, he
had never been served with the motion and, two, his
response to the original motion would have resulted in the
denial of the motion, plaintiff provided the evidence and
arguments he believed would have defeated such motion.
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On reconsideration, the court declined to resolve the
factual question whether plaintiff had been properly served
with the motion. Instead, the court considered the
evidence and arguments plaintiff submitted and considered
whether they would have defeated the original motion for
summary judgment. Determining they would not have, the
court denied the motion for reconsideration.
II
On appeal, plaintiff contends the trial court erred
because it failed to (1) consider his motion for
reconsideration; (2) recognize there were material issues
of fact in dispute that precluded summary judgment; and (3)
correctly interpret the policy language. We reject these
contentions and affirm.
We review a decision to grant summary judgment "in
accordance with the same standard as the motion judge."
Globe Motor Co. v. Igdalev, 225 N.J. 469, 479 (2016)
(quoting Bhagat v. Bhagat, 217 N.J. 22, 38 (2014)).
Summary judgment must be granted if "the pleadings,
depositions, answers to interrogatories and admissions on
file, together with affidavits, if any, show that there is
no genuine issue as to any material fact challenged and
that the moving party is entitled to a judgment or order as
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a matter of law." R. 4:46-2(c). Of course, the trial
court must grant all legitimate inferences in favor of the
non-moving party. Ibid.
First, it is obvious from the record the court did
review plaintiff's motion for reconsideration, taking into
to consideration the evidence and arguments plaintiff would
have presented had he responded to defendant's original
motion. Nevertheless, plaintiff did not prevail, but not
because the court failed to consider plaintiff's position.
Plaintiff's motion was denied because there were no
questions of fact barring summary judgment, and, more
important, as a matter of law, the policy language
supported defendant's position.
In his brief, plaintiff contends there exists a
question of fact that warranted the denial of the motion.
Specifically, plaintiff notes his adjustor had claimed in
his certification that both he and plaintiff disagreed with
defendant about the replacement cost value to restore the
entire house. Plaintiff did not assert there were any
other material facts in dispute which the trial court
overlooked.
The certification of the adjustor to which plaintiff
refers states "[n]either myself nor plaintiff ever agreed
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to [defendant's] determination of the replacement cost o[r]
actual cash value of plaintiff's claim." However, only the
plaintiff's consent was required, and his signing of the
proof of loss – under oath no less – created the requisite
proof plaintiff did accede and agreed with defendant's
estimates, and there is no competent evidence indicating
otherwise. Further, plaintiff did not submit his own
certification in support of the reconsideration motion
setting forth how his representations in the proof of loss
were erroneous. He merely submitted his adjustor's
certification, which was insufficient.
As for plaintiff's argument the court misinterpreted
the policy language, he maintains the policy language is
ambiguous. He argues the trial court should have heeded
his adjustor's assertion it is standard within the
insurance industry to release to an insured the value of
the depreciation attributable to a component part of a
project once that component is repaired or replaced.
Plaintiff maintains because replacement cost value,
depreciation, and actual cash value are broken down in an
estimate for each repair or replacement job, the
depreciation amount for each job is easily ascertainable.
Thus, according to him, defendant was compelled to pay the
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value of the depreciation after each job and not upon the
completion of the entire project.
First, the expert opinion provided by the adjustor in
his certification was not provided to defendant before the
discovery end date, and plaintiff had not, as required by
Rule 4:17-7, certified the adjustor's expert opinion was
not reasonably available or discoverable by the exercise of
due diligence prior to the discovery end date. In the
absence of such a certification, the court was required to
disregard the adjustor's expert opinion. See R. 4:17-7.
Second, and more important, the policy language here is not
ambiguous. As with other contracts, the terms of an
insurance policy define the rights and responsibilities of
the parties. N.J. Citizens United Reciprocal Exch. v. Am.
Int'l Ins. Co. of N.J., 389 N.J. Super. 474, 478 (App. Div.
2006). "The interpretation of an insurance contract is a
question of law for the court to determine, and can be
resolved on summary judgment." Adron, Inc. v. Home Ins.
Co., 292 N.J. Super. 463, 473 (App. Div. 1996). The
court's standard of review regarding conclusions of law is
de novo. Estate of Hanges v. Metro. Prop. & Cas. Ins. Co.,
202 N.J. 369, 385 (2010).
"Generally, an insurance policy should be interpreted
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according to its plain and ordinary meaning." Voorhees v.
Preferred Mut. Ins. Co., 128 N.J. 165, 175 (1992). If the
plain language of the policy is clear and unambiguous, then
there is no need for further inquiry. Chubb Custom Ins.
Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238
(2008). Certainly, "an insurance policy is not ambiguous
merely because two conflicting interpretations have been
offered by the litigants." Simonetti v. Selective Ins.
Co., 372 N.J. Super. 421, 428 (App. Div. 2004). "A genuine
ambiguity arises only where the phrasing of the policy is
so confusing that the average policyholder cannot make out
the boundaries of coverage." Passaic Valley Sewerage
Comm'rs v. St. Paul Fire & Marine Ins. Co., 206 N.J. 596,
608 (2011) (quoting Progressive Cas. Ins. Co. v. Hurley,
166 N.J. 260, 274 (2001)).
Here, section 2.d. of the policy language states
defendant "will not pay more than the actual cash value of
the damage until actual repair or replacement is complete."
Then, once the actual repair or replacement is complete,
defendant will "settle the loss as noted in 2.a. and b.
above." Section 2.b. is not implicated here, but 2.a.(3)1
states defendant will pay the cost of the repairs or
1
Section 2.a.(1) and (2) are not applicable.
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replacement and the depreciation, minus the deductible,
after the necessary amount to fix the damaged building has
been actually spent.
Read together, section 2.a.(3) and section 2.d.
require all of the repairs or replacements in the building
be completed before any depreciation can be released to the
insured. (Here, the actual cost to repair had been
previously provided to plaintiff before he commenced work
on the house). Section 2.a.(3) does not state depreciation
on a component part of a building may be released to an
insured once that part is repaired or replaced but, rather,
when the amount necessary to repair and replace "the
damaged building" has been spent. Defendant is not
compelled to make periodic payments from the depreciation
reserve as various repairs or replacement work is completed
on a piecemeal basis, but only when the work on the entire
building has been completed.
Here, plaintiff fixed the roof but did not complete
any of the other work on the building for which he had been
provided $15,010.52. Therefore, he is not yet eligible to
receive the value of any depreciation, or entitled to any
other payments, from defendant.
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We have considered plaintiff's remaining arguments and
conclude they are without sufficient merit to warrant
discussion in a written opinion. See R. 2:11-3(e)(1)(E).
Affirmed.
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